– Nigeria has sold a $1billion Eurobond in the international bond market
– The Eurobond was 780 per cent oversubscribed
– This demonstrates a strong market appetite for Nigeria by international investors
Nigeria has sold a $1billion Eurobond in the international bond market and it was 780 per cent oversubscribed signalling a strong market appetite for Nigeria by international investors.
The deal was priced at a yield of 7.875 per cent and was approximately 8 times oversubscribed, the Debt Management Office (DMO) said in a statement yesterday, February 9.
“Nigeria is delighted to have successfully priced its third Eurobond issue. We have successfully extended the tenor of our borrowing programme in the international capital markets to 15 years, at a price that reflects belief in the quality of Nigeria’s cash flows and government,” DMO Director General, Abraham Nwankwo said.
The news is coming after a year of setbacks in the government’s attempts to tap international bond markets.
The government also revealed that the newly established US$1 billion Global Medium Term Note programme will bear interest at a rate of 7.875 per cent and will mature on February 16, 2032 with a bullet repayment of the principal.
Nigeria intends to use the proceeds of the notes to fund capital expenditure in the 2016 budget.
“The development was clearly a sign of renewed confidence in the economy which has been hurt by the slump in crude oil prices.
“This is despite continued volatility in emerging and frontier markets and it shows confidence by the international investment community in Nigeria’s economic reform agenda.
“The offering attracted significant interest from leading global institutional investors,” the ministry of finance said in a statement.
Commenting on the successful pricing, Finance minister Kemi Adeosun said: “Nigeria is implementing an ambitious economic reform agenda designed to deliver long-term sustainable growth and reduce reliance on oil and gas revenues while reducing waste and improving the efficiency of government expenditure.
“At the heart of the agenda is a commitment to invest in developing Nigeria’s infrastructure through a target 30 per cent annual budget commitment to capital expenditure.
“We are establishing the building blocks for long-term growth and making the hard decisions that must be made to reset our economy appropriately.”
Adeosun had previously told the Nigerian media that the federal government wants to raise $1 billion in what would be Nigeria’s first Eurobond since 2013.
The government hired Citigroup Inc. and Standard Chartered Bank Plc to organize the roadshow in the United States and London from Friday, February 3.
Courtesy: NAIJ
